The Monetary Policy Committee (MPC) of the Bank of Ghana decided to reset the Cash Reserve Ratio on domestic currency deposits for banks from 12 per cent to 14 per cent.
This takes effect from 13th April, 2023.
In addition, the Bank will step up liquidity management operations to address excess liquidity conditions in the market.
Governor of Bank of Ghana (BoG) Dr Ernest Addison said at he 111th MPC press conference in Accra on Monday, March 27 that “The Committee will continue to monitor developments in the banking sector and deploy other macroprudential tools to ensure financial stability.”
Dr Ernest Addison further said that the MPC noted that the budget statement for 2023 has set fiscal policy on a consolidation path.
He says this is consistent with key elements agreed with the International Monetary Fund (IMF) at the Staff Level in December 2022.
The Domestic Debt Exchange Programme launched by the government, new revenue measures, and structural fiscal reforms will provide significant reduction of debt service and help create fiscal space, Dr Addison stated.
Addressing the 111th Monetary Policy Committee (MPC) press conference in Accra on Monday, March 27, he said the fiscal outlook is contingent on financing of the budget and will require the conclusion of the Domestic Debt Exchange Programme as well as securing the requisite financing assurances from bilateral donors. Indications are that these discussions are proceeding well.
“Based on the above, it is imperative that Parliament prioritizes the passage of the revenue bills currently before it,” Dr Addison said.
He further intimated that under the Staff Level Agreement with the IMF, the Bank of Ghana and the Ministry of Finance have finalised a Memorandum of Understanding on zero financing to the budget, which will be signed shortly.
“The passage of the relevant revenue bills by Parliament will therefore conclude the required prior actions to advance Ghana’s programme to the IMF Executive Board.
“This will be critical in resetting the economy on the path of recovery, including putting it firmly on a disinflation path and sustained growth,” he said.